Civil War era silver shortages led to widespread hoarding of all silver coins, and most one and five cent coins as well. Various alternative were tried, including encapsulated postage and privately issued coinage. The Treasury eventually settled on issuing fractional currency. These small denomination (1 to 50 cents) were never popular, as they were easy to lose and unwieldy in large amounts.

The answer to this issue was reached in 1865 with the introduction of the three cent nickel coin. This coin was composed of copper and nickel and was larger than the silver coin of the same denomination. The coin featured a Liberty head obverse and another Roman Numeral 'III' reverse. The three cent nickel was never intended as a permanent issue, only as stop gap measure until the wartime hoarding ceased. However, production of the coin continued until 1889, 16 years after the three cent silver was discontinued.